European businesses remain optimistic about Việt Nam amidst the toll of Typhoon Yagi, bringing the Business Confidence Index (BCI) to 52. — Photo from the report
The European Chamber of Commerce in Việt Nam (EuroCham Việt Nam) has released its Q3 2024 Business Confidence Index (BCI) report, showing a positive trend in business sentiment despite the economic challenges posed by Typhoon Yagi and operational hurdles.
The BCI score saw a notable increase, rising from 45.1 in the third quarter last year to 52 this quarter, signalling a strong year-on-year recovery despite tough external conditions.
EuroCham’s BCI survey is conducted by Decision Lab, which gathers and analyses insights from the chamber’s network of 1,400 members.
This quarterly assessment acts as a barometer of sentiment among European businesses operating in Việt Nam, providing real-time insights into the evolving business landscape of one of Southeast Asia's most dynamic markets. The BCI gauges perceptions of current conditions and future expectations, helping to inform strategic decisions and policy advocacy.
The damage caused by Typhoon Yagi, which has severely impacted the infrastructure and agricultural sectors in northern Việt Nam, has led the Vietnamese government to forecast a 0.15 per cent reduction in GDP for this year, with estimated losses reaching US$3.3 billion.
Yet EuroCham’s latest survey, conducted from September 12 to 25 (after the typhoon), shows that nearly half (47.4 per cent) of respondents are confident their companies will see improvement in the coming quarter. Additionally, long-term optimism remains high, with 69.3 per cent of respondents expecting a favourable business climate over the next five years.
This positive outlook is further reinforced by Việt Nam’s continued appeal as an investment destination, with 67 per cent of European businesses still recommending the country despite ongoing challenges.
“Despite the recent economic strain caused by Typhoon Yagi, the resilience and adaptability of both the Vietnamese economy and European businesses operating here are evident in this latest survey. These results are not just numbers; they tell a story of Việt Nam’s evolving role as a strategic business hub,” said Bruno Jaspaert, Chairman of EuroCham Việt Nam. “The typhoon’s impact also highlights the urgent need to address climate change, making the Green Economy Forum & Exhibition (GEFE) 2024 from October 21 to 23 a timely platform to drive necessary dialogue on how Việt Nam can remain competitive while transitioning towards a greener, more sustainable future.”
Following the new Decree on the mechanism for Direct Power Purchase Agreements (DPPA) issued in July this year, nearly 30 per cent of respondents expect to benefit from renewable energy projects, further solidifying Việt Nam’s commitment to a green transition.
One in four service providers and companies with 100 or more employees anticipate the DPPA will benefit them moderately or significantly.
While approximately half (47.4 per cent) of surveyed businesses are confident in their ability to fully transition to renewable energy by 2050, gaps remain in policy understanding and implementation. — VNS